In an important decision for Canadian resource companies
operating abroad, the British Columbia Supreme Court has permitted
claims alleging human rights abuses at a mine in East Africa to
proceed to trial. In its decision, the Court considered whether
British Columbia's representative proceeding rule could be used
in the context of a "common law class action".
Ultimately, the Court held that the plaintiffs did not satisfy the
criteria for the rule because they failed to establish that the
unrepresented parties had the same interest . The Court also held
that the plaintiffs were improperly attempting to circumvent the
residency requirement of the Class Proceedings Act.

Background

The plaintiffs are three Eritrean nationals who are now
refugees. In November 2014, they commenced a representative
proceeding against Nevsun Resources Ltd., a British Columbia mining
company, in connection with the Bisha Mine in Eritrea. They claim
that they were forced to work at the mine by the Eritrean state and
military, acting pursuant to construction agreements with Nevsun
and its Eritrean subsidiary. The plaintiffs are seeking damages on
behalf of all Eritreans forced to work at the mine from September
2008 to the present. Their claims are based on alleged breaches of
customary international law.

In a series of preliminary applications, Nevsun argued that the
claims should not proceed because: 1) Eritrea is the more
appropriate forum; 2) the plaintiffs' claims are barred by the
act of state doctrine; 3) breaches of customary international law
are not justiciable; and 4) the case is not appropriate for a
representative proceeding. In a lengthy decision released October 6, 2016, Abrioux J.
rejected the first three applications, but agreed with Nevsun on
the fourth. The case will now proceed to trial on an individual
basis.

Supreme Court's Decision

Jurisdiction

Nevsun argued that the claims should be heard in Eritrea because
the majority of both the witnesses and the documentary evidence is
located in that country. Nevsun relied in particular on a recent
case, Garcia v. Tahoe Resources Inc., 2015 BCSC 2045, in which the Court declined to
exercise jurisdiction over a claim involving an alleged shooting at
a mine in Guatemala for similar reasons. Here, Abrioux J.
acknowledged that evidentiary concerns are typically given
significant weight when considering whether to decline to exercise
jurisdiction. However, unlike in Garcia, there is a real
risk of an unfair trial in Eritrea because: 1) the plaintiffs are
refugees who will face significant consequences if they attempt to
return; and 2) evidence from Eritrean judges and lawyers
demonstrates that there is a high level of state interference with
the justice system. Given these exceptional circumstances, the
Court held that Eritrea is not the more appropriate forum.

Customary international law

The Court next considered whether breaches of customary
international law may form the basis of a civil proceeding in
British Columbia. The customary international rules relied on by
the plaintiffs in this case (including prohibitions against
slavery, torture, and crimes against humanity) fall into a special
subset of customary international law referred to as jus
cogens, or peremptory norms. These rules are binding on all
states and permit no exceptions.

Nevsun argued that customary international law claims are barred
by the act of state doctrine, a common law rule holding that courts
cannot adjudicate the lawfulness of the acts of a foreign state
committed within that state's territory. The Court acknowledged
that this doctrine forms part of the common law of Canada. However,
given the uncertainty surrounding the scope and application of the
doctrine (it has yet to form the basis of a decision by any
Canadian court), the Court was not prepared to dismiss the
plaintiffs' claims on a preliminary application.

Nevsun also argued that the plaintiffs' claims have no
reasonable prospect of success because customary international law
does not apply to corporations and cannot form the basis of a
private law action. Again the Court disagreed, noting the uncertain
state of the law in this area. Although the Court acknowledged that
the plaintiffs will face significant obstacles at trial, it could
not conclude that the plaintiffs' novel claims are bound to
fail.

Representative proceeding

Finally, the Court held that the plaintiffs could not continue
the action as a representative proceeding under Rule 20-3(1) of the
Supreme Court Civil Rules. The plaintiffs relied on Rule
20-3 rather than the Class Proceedings Act, R.S.B.C. 1996, c. 50 (CPA), because
they are not residents of British Columbia. They argued that Rule
20-3 preserves common law class actions in the province. The Court
disagreed, explaining that the CPA sets up a comprehensive
code for class actions in British Columbia. As a result,
non-CPA proceedings are governed by Rule 20-3 and its
jurisprudence. This rule is limited to cases in which plaintiffs
allege a common right or seek a common remedy. The Court concluded
that a representative proceeding was not appropriate for this case,
given the factual differences between each proposed class
member.

Implications

Arya v. Nevsun represents the latest development in a
number of recentcases involving Canadian resource companies
and allegations of their complicity in human rights abuses abroad.
Significantly, however, this is the first case in which claims
against a Canadian corporation for alleged breaches of customary
international law have been allowed to proceed. Although the
plaintiffs will certainly face major obstacles at trial, this case
clearly indicates the reluctance of courts to strike novel civil
claims against parent entities operating internationally through
foreign subsidiaries.

This decision is also significant for its consideration of the
suitability for claims of this nature to be brought by way of a
representative proceeding, and the court was clear that such a
proceeding is limited to a narrow class of cases only. It remains
to be seen whether these claims may be suitable for disposition by
way of a class proceeding, but on the basis of the evidence
tendered in this case, the court found the plaintiffs not to have
satisfied the criteria for a "common law class action".
Parties pursuing or defending these claims in the future should
give careful consideration to the evidence necessary to satisfy the
threshold criteria for a class proceeding.

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